Case Study - the Politics of Trade in Steel

Case Study: The Politics of Trade in Steel Do you believe the Bush administration was correct in imposing tariffs in March 2002 on a wide range of steel imports? At the time President Bush decided to impose temporary tariffs on steel imports, 16 steel manufacturers were operating under bankruptcy and a total of 30 had declared bankruptcy over the prior few years. U.S. steel producers were losing market share to foreign steelmakers in large part due to subsidies and other trade issues. Bush and his Cabinet chose to implement the tariffs because of "the need to speed up negotiations to reduce the world's huge overcapacity in steel production" (Editors BW Online, 2002, para. 5).The tariffs were the largest trade-protection grant since President Regan had taken similar steps to shore up the steel industry. President Clinton had ordered a study that was done in 2000 with the resulting information "the U.S. [steel] industry was the victim of foreign subsidies and other unfair trade practices" (Editors BW Online, para.7) . Commerce Secretary Donald L. Evans noted that tariffs were needed in order to manage Europe, South Korea and Japan, who were the worst in regard to excess capacity. Conversely, White House Economic Adviser, Lawrence B. Lindley, cautioned that raising tariffs would only make U.S. manufacturers less competitive because it would raise prices, and Secretary of State Colin Powell noted that this move would alienate coalition partners of the war on terrorism. The EU retaliated on March 27, 2002, by imposing similar tariffs on steel imports to attempt to prevent a flood of steel imports into the EU. EU President Romano Prodi urged President Bush not to proceed with his "protectionist measures" (Editors CNN.com, 2002). Intended to last for three years, President Bush ended the tariffs on December 4, 2003, one month after the World Trade Organization's court declared the tariffs to be a violation of global trade laws. U.S. trade Representative, Robert Zoelleck declared the tariffs had accomplished their mission and President Bush noted that "Productivity is high, business investment is rising the economic stimulus package is working" (Lehrer, 2003, para. 7). Zoelleck noted that during the tariff period the steel industry was provided the time it needed to restructure operations so as to "make the industry more competitive" (Lehrer, para. 9). However, statistics show that during the tariff period of 21 months, both production and employment in the U.S. steel industry continued to decline. The American Iron and Steel Institute and the International Iron and Steel Institute reported that "U.S. production was down 6.7% between October 2002 and October 2003, despite the increased tariffs" (Ackman-1, 2003, para. 7). Despite the fact that steel imports were down, which was one of the goals of the tariffs, "In September 2003, U.S. Steel production was down 15% [from] September 2002" (Ackman-2, 2003, para. 4). Was President Bush correct in implementing the tariffs? I believe it was the only action he could have taken under the circumstances. He had to do something to give the U.S. steel industry the opportunity, however slim, to revive itself. Even though the move incensed the international market, Bush was primarily accountable to U.S. interests and steel had been a staple of the U.S. economy for many years. Unfortunately, I believe the respite was too little, too late and I personally attribute much of the problem to the actions and dominance of union control in the U.S. steel industry. As the WTO noted, "the decline in the U.S. steel industry is a decades-long phenomenon" (Ackman-2, 2003, para. 5). Who are the main beneficiaries of protective tariffs such as those imposed on steel imports? Who are the losers? As far back as the 1800s, "Tariff revenues were the main source of revenue to the federal government" (Editors EcEdWeb, 2006, para. 1). This remains important today, as Hill notes "While the principal objective...

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...Bush administration was correct in imposing tariffs in March 2002 on a wide range of steel imports?
I believe that President Bush needed to do something to protect the US steel market. At the time that President Bush decided to impose temporary tariffs on steel imports, 16 steel manufactures were already operating under bankruptcy protection (Hill, 2005). The whole idea of the tariffs as explained by Leo Gerard, the president of the United Steelworkers of America, was to protect American jobs by giving the industry a chance to rebound and to give the steel manufacturers a chance to upgrade their mills so that they could compete against the more efficient foreign producers (Hill, 2005). Did the Bush administration do the correct thing? I believe that they tried, but in the end the tariffs only protected the profits of steel employees.do you htink it protected workers?
2. Who are the main beneficiaries of protective tariffs such as those imposed on steel imports? Who are the losers?
The main beneficiaries are supposed to be the American economy, "domestic producers and employees against foreign competition, and to raise funds for the federal government" (Hill, 2005). On the flip side, the increase in tariffs only hurt the consumers and foreign businesses by increasing the prices of steel and almost starting a trade war with foreign economies. yes...

...The Politics of Trade in Steel
1. Does the World Trade Organization in this case represent a loss of U.S. national sovereignty? Why do you think the WTO sided with the European Union?
I don't think the Work Trade Organization represents a loss of U.S. national sovereignty. The WTO in this case is simply doing its job  overseeing international trade and enforcing the agreement that all the WTO member nations including the United States signed.
I think the World Trade Organization might have sided with the European Union because they felt that the U.S. had gone too far with the tariffs. They probably thought that if they did allow the EU to impose counter tariffs on the U.S. that could ultimately damage trade between the two countries and start a trade war, the U.S. might come to their senses. I believe that this was an attempt on the World Trade Organization's part to bring a truce between the two countries.
2. If all the tariffs on international trade in steel were removed, and subsidies to steel exporters around the world were banned, who would this benefit? Who would lose from such action?
The net beneficiary of such a move would be steel consumers worldwide. They would enjoy the most competitive prices industry can offer.
There...

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Mary Roberts had been with the company three years when she was promoted to manager of the tax department which was part of the controller’s division.Within four months she became a supervisor of ten staff accountants to fill a vacancy.Her superior believed her to be most qualified individual to fill the position.
Many senior employees resent her that she so young to fill the position and what made them more upsets was the fact tax managers did not discuss the promotion.
QUESTION:
1.What can Mary Roberts do about the resentful senior employees?
Mary should tackle this head on she should be direct and assertive about her expectation and when people are crossing the line that means she need to be clear with people when their behavior doesn’t meet her standards and she need to be willing To set and enforce consequence if it doesn’t change
2. Can higher management do anything to help Roberts make the transitions to greater responsibility?
Yes, because they are the one who put her in that position of course they will help Mary interms of guiding it `.
3. Will her lack of technical knowledge hinder Mary’s managerial effectiveness?
No , because lacking on some aspects on technical knowledge cant bankrupt or destroy a company as long she have a guts to face and accepts failures
4. Should Mary’s superior have discussed the promotion with the senior employees before announcing it?
No ,because its not their obligation...

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...STEEL ASIA MANUFACTURING CORPORATION: Company CaseStudySTEEL ASIA MANUFACTURING CORPORATION
COMPANY DESCRIPTION
Steel Asia Manufacturing Corporation (SAMC), a joint venture with TATA Steel from India, is located in Bulacan in the Philippines and produces reinforcing steel bars (also referred to as rebar) for use in construction. The plant was commissioned in 1996 and currently has 400 employees. Annual production is 360,000 tons of steel bars compared to its 400,000 tons annual designed capacity, which is mostly consumed by the domestic market. The company participated in the project to sustain their effort to improve the operation, cut down on production cost through energy efficiency and cleaner production and prepare for an application for Integrated Management System (ISO 9001, ISO 14001 and OSHAS 18000) certification.
PROCESS DESCRIPTION
§ Preheating: Steel billets are received and charged directly in a re-heat walking hearth furnace through the charging door of the furnace. They are reheated for 75 minutes to 1100º using Bunker C (Type #6) fuel oil. The furnace can reheat billets at a maximum rate C of 65 tons per hour. Rolling: Once billets reach the required temperature for rolling, they leave the furnace through the discharging doors and are rolled along a series of 18 tandem (horizontal/vertical) continuous rolling mill stands...

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Table of Contents
Issue #1
Percentage use of Production Capacity
Nucor steel has the largest production capacity capability in North America. However, they have some deficiencies in this area in that in 2010 they utilized just 70 percent of capacity, though it increased in 2011 it was still just 74 percent. Gaining greater production efficiency will reduce costs and in turn increase the profitability of the company.
Issue #2
Rising Scrap Metal Prices
Nucor maintains its competitive advantage through its low cost production, and their use of electric arc furnaces and recycled scrap metals to produce steel. Prices for scrap steel was not higher than $137 until 2004, and reached a peak of $438 in 2008 before the economic recession hit. In 2009 and 2010 prices were $303 and $351 respectively, and then in 2011 hit an all-time high of $439. With their per unit cost structure relying heavily on these scrap steel prices, their ability to achieve greater profitability is reduced. Nucor needs to find a way to off-set these rising prices in order to maintain its low cost strategy.
Issue #3
International Competition and Foreign Subsidies
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...﻿Ria David CaseStudy
Executive summary:
Ria David, a happy mother of two kids, has been a long time employee in Unitrust Bank Ortigas. At first her performance was well rated, all of her officemates and bosses have no problem with her since she has this talent of coping up with almost every kind of people she can encounter. But as time goes, her tardiness record is getting high. Also the jobs included in her job description is not all accomplished by her because of her late arrival in the office which in result leaving the others, especially her supervisor, doing her job in order for it to meet the deadline. In her long stay in the company she’s been under many supervisors, and all of them can’t stand a chance to work with her, resulting all of them transferred in another department. Gina Santillan gave Andre Fernandez, her present supervisor, advice to handle this situation and that is to have “maximum tolerance”. Tardiness and lack of work completion are not the only things her supervisors can’t stand with her. It is also her good ability in spreading rumors about her supervisors. They can’t transfer her to another department or give her another job because of her lack of skills. Management did not rate her for quite some time now because for them, it was useless to appraise her performance. They can’t fire her because she is a member of the union.
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